MAXWELL
TECHNOLOGIES, INC.

STOCK OPTION AGREEMENT

UNDER 1995 STOCK OPTION PLAN


          THIS
AGREEMENT, made and entered into as of May 19, 2003 by and between MAXWELL
TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and Kenneth
Potashner (“Optionee”).

WITNESSETH:

          WHEREAS,
the Board of Directors of the Company, with the approval and authorization of
the shareholders thereof, has adopted the 1995 Stock Option Plan (the “Plan”),
in the conviction that the interests of the Company and key employees
(including officers and directors and other service providers) of the Company
and its subsidiaries will be advanced by encouraging and enabling said persons
to acquire a proprietary interest in the Company; and

          WHEREAS,
the Plan is administered by the Stock Option Committee of the Board of
Directors of the Company (the “Committee”); and

          WHEREAS,
the Committee, having determined that Optionee is qualified to participate
under the Plan, has, as of May 19, 2003 (the “Grant Date”), granted to Optionee
the option to acquire stock of the Company.

          NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:

          1.          Option
Grant and Accrual of Right to Purchase. 
The Company hereby grants to Optionee, at the times, on the terms and
subject to conditions set forth herein, the right and “non-qualified stock option”
to purchase an aggregate of 94,251 shares of the Company’s Common Stock, par
value $.10, at the purchase price of $6.18 per share (the “Option”). The Option
shall continue for, and is limited to, the period ending on May 8, 2007, except
as and to the extent that (a) the term of the Option may be reduced as provided
in Paragraphs 4 and 5 hereof, or in the Plan, or (b) the Option may be
terminated as provided in Paragraph 13 hereof. In no event may the Option or
any portion thereof be exercised after the end of the Option Period.

          The
Options are fully exercisable at the date of grant.

          Prior
to the expiration of the Option Period as specified above, and subject to the
provisions hereof, all or any portion of the shares of Common Stock available
for exercise may be purchased at any time and from time to time after they
become exercisable; provided that in no case may Optionee exercise the Option
for a fraction of a share.

          2.          Method
of Exercise.  The Option shall be
exercisable by the giving of written notice of exercise to the Company, in
either of the manners set forth below in this Paragraph 2, specifying the
number of shares to be purchased and accompanying such notice with payment by
cash and/or check payable to the Company of the full purchase price therefor
and, if required by the Company, the written representations and agreements
referred to in Paragraph 7 hereof. If 








sent by mail such written
notice shall be deemed for all purposes to be given and the Option exercised on
the second business day following the date the same is deposited in the United
States mail, properly addressed to the Secretary of the Company, with postage
thereon prepaid. If personally delivered, such written notice shall be deemed
for all purposes to be given and the Option exercised on the date the same is
personally delivered to the President of the Company (or such other officer as
may be designated by the Company in writing).

          3.          Who
May Exercise.  The Option shall be
exercisable during the lifetime of Optionee only by the Optionee. In the event
that the notice specified in Paragraph 2 hereof shall, pursuant to the
provisions of Paragraph 5 hereof, be given by any person other than Optionee,
such notice shall be accompanied by appropriate evidence satisfactory to the
Company to establish such person’s right to exercise the Option.

          4.          Exercise
in the Event of Death.  Subject to
the other provisions hereof, in the event of the death of Optionee while in the
employ of the Company or a subsidiary of the Company, the Option may be
exercised by the person or persons to whom Optionee’s rights under the Option
shall pass by Optionee’s will or by the laws of descent and distribution. In
such event, the Option may be exercised during the one year period following
the Optionee’s date of death, but only to the extent that Optionee was entitled
to exercise the Option at the date of death; provided, however, that in no
event shall the Option or any portion thereof be exercisable except during the
Option Period. The right to exercise the Option provided under this Paragraph
5, to the extent permitted hereunder, shall terminate on the first anniversary
of the date of the Optionee’s death.

          5.          Stock
To Be Issued.  Shares to be issued
on the exercise of the Option may, at the election of the Company, be either
authorized and unissued shares or shares previously issued and re-acquired by
the Company.

          6.          Investment
Representation and Restrictions on Disposition.  By accepting the Option, Optionee agrees for himself or herself
and any other person or persons entitled to exercise the Option pursuant to the
provisions of Paragraph 5 hereof, that any and all shares purchased upon the
exercise of the Option shall be acquired for investment and not with a view to
distribution, and that if required by the Company: 1) each notice of the
exercise of all or any portion of the Option shall be accompanied by such
representations and agreements in writing, signed by the Optionee or such other
person or persons entitled to exercise the Option, as the case may be, and in
form and substance satisfactory to the Company, to such effect as the Company
may deem necessary in order to insure compliance with all laws, orders, rules,
regulations, conditions and undertakings of any kind which may be in effect at
any time with respect to the purchase or disposition of any shares purchased
upon exercise of the Option, including, but not limited to, a representation to
the effect that the shares covered by such notice are being acquired in good
faith for investment and not for distribution; 2) the certificate or
certificates evidencing the shares may be legended with language appropriate to
give notice of the restrictions referred to in this Paragraph 7; and 3) the
Company may place “stop orders” or other impediments to the transfer of the
shares until it is satisfied that the transfer can be made in conformity with
the representations and agreements of Optionee made pursuant to this
Paragraph 7. Optionee understands that the effect of this Paragraph 7 is
to restrict the right to sell, transfer or otherwise distribute such shares
except in accordance with the Securities Act of 

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1933 (“the Act”) and all
other laws, orders, rules, regulations, conditions and undertakings of any kind
which may be in effect at any time with respect to the purchase or disposition
of such shares. In the event such shares are or shall at any time hereafter
become duly registered under the Act, then those provisions of this Paragraph 7
which the Company determines are rendered unnecessary by reason of such
registration shall not be operative during such time as said registration
remains effective.

          7.          Restrictions
on Exercise.  Each exercise of the
Option shall be subject to the condition that if at any time the Company shall
determine in its discretion that 1) the satisfaction of withholding tax or
other withholding liabilities, or 2) the listing, registration or qualification
of any shares otherwise deliverable upon such exercise upon any securities
exchange or under any state or federal law, or 3) the consent or approval of
any regulatory body, or 4) the perfection of any exemption from any such
withholding, listing, registration, qualification, consent or approval is
necessary or desirable as a condition of, or in connection with, such exercise
or the issuance, delivery or purchase of shares hereunder, then in any such
event, such exercise shall not be effective, and the Company shall not be
required to accept a notice of exercise delivered by Optionee pursuant to
Paragraph 2 hereof or the tender of any portion of the purchase price for the
shares covered by such exercise or to issue or deliver any certificate or
certificates for shares intended to be purchased by such exercise, unless such
withholding, listing, registration, qualification, consent, approval or
exemption shall have been effected, obtained or perfected free of any
conditions not acceptable to the Company.

          8.          Capital
Adjustments.  In the event that
prior to the delivery by the Company of all the shares covered by the Option,
there shall be any change in the outstanding common shares of the Company in
the manner described in Paragraph 7 of the Plan, the number of shares
deliverable upon the exercise of the Option and the purchase price therefor
shall be adjusted as provided in said Paragraph 7.

          9.          Issuance
of Certificates and Rights as Shareholders of the Company.  As soon as practicable after the exercise of
the Option as provided in Paragraph 2 hereof, but subject to the provisions of
Paragraphs 7 and 8 hereof, the Company shall issue and deliver to Optionee or
any other person who has exercised the Option pursuant to the provisions of
Paragraph 5 hereof a certificate evidencing the shares purchased thereby.
Neither Optionee nor any other person entitled to exercise the Option pursuant
to the provisions of Paragraph 5 hereof shall be or have any of the rights or
privileges of a shareholder of the Company in respect of any of the shares
issuable upon the exercise of the Option unless and until a certificate
representing such shares shall have been issued and delivered.

          10.        Transferability
of Option.  Except as otherwise
herein provided, the Option and the rights and privileges conferred hereby may
not be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of the Option or any right or privilege
conferred hereby contrary to the provisions hereof, or upon the levy of any
attachment or similar process on the rights and privileges conferred hereby,
contrary to the provisions hereof, the Option and the rights and privileges
conferred hereby shall immediately become null and void.

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          11.        Interpretation
of Agreement and Plan.  The
Committee shall have the full and final authority in its discretion to
construe, interpret and define all terms and provisions of this Agreement and
the Plan and to correct any defect or supply any omission or reconcile any
inconsistency herein and in the Plan and to prescribe rules and regulations
relating to the administration of the Option and other similar options granted
under the Plan, provided that such constructions, interpretation, definitions,
corrections, additions or reconciliations and other such actions are permitted
by the Plan, a copy of which is attached hereto (unless separately delivered
prior to or concurrently with the execution hereof by Optionee) and all of the
provisions of which are incorporated herein by this reference thereto.

          12.        Cancellation
of Option.  Notwithstanding anything
herein to the contrary, the Company may cancel the Option, or any portion
thereof, at any time if the Company determines that Optionee has 1) committed
fraud, embezzlement or other act of dishonesty; 2) engaged in other gross
misconduct or deliberate disregard of the law; 3) made any unauthorized
disclosure of any secret or confidential information of the Company or any of
its subsidiaries.

          IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

	
   
	
   
	
  


  	
   
	
   

	
   
	
   
	
  Kenneth Potashner, “Optionee”
	
   

	
   
	
   
	
   
	
   

	
   
	
   
	
  MAXWELL TECHNOLOGIES, INC.
	
   

	
   
	
   
	
   
	
   

	
   
	
   
	
  By:
	
   
	
   

	
   
	
   
	
   
	
  


  	
   
	
   

	
   
	
   
	
   
	
  Richard D. Balanson, CEO and President
	
   




Sale Notification

          The
undersigned agrees to notify the Company of any sale of the shares acquired
upon exercise of the Option if such shares are sold within 12 months of their
acquisition.


	
   
	
   
	
  


  	
   
	
   

	
   
	
   
	
  Kenneth Potashner
	
   





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SEPARATION
AGREEMENT AND GENERAL

RELEASE OF ALL CLAIMS

                       This
Separation Agreement and General Release of All Claims (“Agreement”) is made by
and between Kenneth Potashner (“Director”) on the one hand, and Maxwell
Technologies, Inc. (“the Company”) on the other. (Collectively, Director and
the Company shall be referred to as “the Parties.”)

                       1.          Director
has served as an employee of the Company and as a member of the Board of
Directors of the Company. As of May 8, 2003 (the “Effective Date”), Director
served only as a member of the Board of Directors of the Company, and on such
date resigned from the Company Board of Directors. From the Effective Date
until May 8, 2007 (the “End Date”), Director will be available from time to
time as reasonably requested for consultation with the Chief Executive Officer
of the Company regarding the Company’s business operations. The Company is
prepared to provide Director the benefits provided herein in exchange for such
consulting services and the other terms and conditions of this Agreement, and
the Director is prepared to enter into this Agreement in exchange for such
benefits. This Agreement will also resolve any and all differences related to
Director’s prior employment with the Company and service as a member of the
Board of Directors and/or the cessation of that employment and service and any
known or unknown claims between the Parties. For these reasons, the Parties
have entered into this Agreement.

                       2.          In
consideration of Director’s consulting services and other agreements under this
Agreement, Director shall receive fully vested stock options to purchase 94,251
shares of the Company’s common stock at $6.18 per share. Such stock options
will be issued pursuant to the standard terms and conditions of the 1995 Stock
Option Plan and the related grant agreement (other than a vesting schedule
which will not apply). In accordance with the terms of the 1995 Stock Option
Plan and the agreement covering such stock options, Director will have a 60-day
period following the End Date to exercise any such options or they will expire.
Director hereby acknowledges and agrees that, except for the stock options
granted pursuant to this paragraph 2, Director has surrendered (and has no
rights to) any and all other stock options to purchase shares of stock of the
Company or any of its subsidiaries.


                       3.          In
consideration of and in return for the promises and covenants undertaken herein
by the Company, including the grant of the stock options under paragraph 2
herein, and for other good and valuable consideration, receipt of which is
hereby acknowledged, Director does hereby acknowledge full and complete
satisfaction of and does hereby release, absolve and discharge the Company and
the Company’s parents, subsidiaries, affiliates, employees, related companies
and business concerns, past and present, and each of them, as well as each of
their partners, trustees, directors, officers, agents, attorneys, servants and
employees, past and present, and each of them (hereinafter collectively
referred to as “Releasees”) from any and all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, grievances,
wages, vacation payments, severance payments, obligations, commissions,
overtime payments, debts, expenses, damages, judgments, orders and liabilities
of whatever kind or nature in state or federal law, equity or otherwise,
whether known or unknown to Director which Director now owns or holds or has at
any time owned or held as against Releasees, or any of them, including specifically
but not exclusively and without limiting the generality of the 

1








foregoing, any and all
claims, demands, grievances, agreements, obligations and causes of action,
known or unknown, suspected or unsuspected by Director: (1) arising out of Director’s
prior employment with the Company or service as a member of the Board of
Directors or the ending of that employment and service; or (2) arising out of
or in any way connected with any claim, loss, damage or injury whatever, known
or unknown, suspected or unsuspected, resulting from any act or omission by or
on the part of the Releasees, or any of them, committed or omitted on or before
the Effective Date. Also without limiting the generality of the foregoing,
Director specifically releases the Releasees from any claim for attorneys’ fees
and/or costs of suit. DIRECTOR SPECIFICALLY AGREES AND ACKNOWLEDGES DIRECTOR IS
WAIVING ANY RIGHT TO RECOVERY BASED ON STATE OR FEDERAL AGE, SEX, PREGNANCY,
RACE, COLOR, NATIONAL ORIGIN, MARITAL STATUS, RELIGION, VETERAN STATUS,
DISABILITY, SEXUAL ORIENTATION, MEDICAL CONDITION, OR OTHER ANTI-DISCRIMINATION
LAWS, INCLUDING, WITHOUT LIMITATION, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964,
THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH DISABILITIES ACT
AND THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, OR BASED ON THE DIRECTOR
RETIREMENT INCOME SECURITY ACT, ALL AS AMENDED, WHETHER SUCH CLAIM BE BASED
UPON AN ACTION FILED BY DIRECTOR OR BY A GOVERNMENTAL AGENCY.

                       4.          It
is the intention of Director in executing this Agreement that it shall be
effective as a bar to each and every claim, demand, grievance and cause of
action hereinabove specified. In furtherance of this intention, Director hereby
expressly waives any and all rights and benefits conferred upon Director by the
provisions of Section 1542 of the California Civil Code and expressly consents
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those relating to unknown
and unsuspected claims, demands and causes of action, if any, as well as those
relating to any other claims, demands and causes of action hereinabove
specified. Section 1542 provides:

                       “A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”


                       Having
been so apprised, Director nevertheless hereby voluntarily elects to and does
waive the rights described in Civil Code Section 1542 and elects to assume all
risks for claims that now exist in Director’s favor, known or unknown, that are
released under this Agreement.

                       5.          The
Company expressly denies any violation of any federal, state or local statute,
ordinance, rule, regulation, policy, order or other law. Nothing contained
herein is to be construed as an admission of liability on the part of the
parties hereby released, or any of them, by whom liability is expressly denied.
Accordingly, while this Agreement resolves all issues regarding the Company
referenced herein, it does not constitute an adjudication or finding on the
merits of any allegations and it is not, and shall not be construed as, an
admission by the Company of any violation of federal, state or local statute,
ordinance, rule, regulation, policy, order or other law, or of any liability.
Moreover, neither this Agreement nor anything in it shall be construed to be or
shall be admissible in any proceeding as evidence of or an admission by the 

2








Company of any violation
of any federal, state or local statute, ordinance, rule, regulation, policy,
order or other law, or of any liability. This Agreement may be introduced,
however, in any proceeding to enforce the Agreement.

                       6.          Without
regard to any other provision of this Agreement, Company acknowledges and
agrees that this Agreement shall not reduce or terminate Director’s rights to
indemnification, defense, exoneration, and to be held harmless from any claims
or actions now pending or brought against him at any time in the future with
regard to Director’s activities as an employee, officer or director of the
Company or any affiliate of the Company or as the designee or nominee of the
Company or any affiliate of the Company, to the extent such rights are created
by law, by the charter documents or bylaws of the Company or by any resolutions
of the shareholders or board of directors of the Company or any committee
thereof, or pursuant to any directors and officers insurance policy or errors
and omissions insurance policy or other liability insurance policy or program
covering the Company, any of its affiliates, or any of its officers, directors,
employees or agents (except for any such reduction or termination that is
applicable generally to the officers, directors, employees or agents of the
Company). Company further agrees not to reduce, terminate, non renew or rescind
any such insurance or indemnification rights, policies or programs with regard
to Director except for any such reduction, termination, non renewal or
rescission that is applicable generally to the officers, directors, employees
or agents of the Company.


                       7.          Director
acknowledges that during Director’s prior employment and service as a member of
the Board of Directors, Director had access to trade secrets and confidential
information about the Company, including but not limited to the Company’s
products and services, research and development of new products and services,
customers, and methods of doing business. Director agrees that Director shall
not disclose any information constituting the trade secrets or confidential
information of the Company or its customers that has not been disclosed to the
general public prior to that time.

                       8.          Each
party expressly agrees that such party will not in any way disparage or
otherwise cause to be published or disseminated any negative statements,
remarks, comments or information regarding the other party.


                       9.          This
Agreement shall be construed in accordance with, and be deemed governed by, the
laws of the State of California.

                       10.        The
Parties hereto acknowledge each has read this Agreement, that each fully
understands its rights, privileges and duties under the Agreement, and that
each enters this Agreement freely and voluntarily. Each party further
acknowledges each has had the opportunity to consult with an attorney of its
choice to explain the terms of this Agreement and the consequences of signing
it.

                       11.        Within
three calendar days of signing and dating this Agreement, Director shall
deliver the executed original of the Agreement to Richard Balanson, Chief
Executive Officer, Maxwell Technologies, Inc., 9244 Balboa Avenue, San Diego,
California 92123. However, Director acknowledges that Director may revoke this
Agreement for up to seven (7) calendar days following Director’s execution of
this Agreement and that it shall not become 

3








effective or enforceable
until the revocation period has expired. Director acknowledges that such
revocation must be in writing addressed to Richard Balanson, Chief Executive
Officer, Maxwell Technologies, Inc., 9244 Balboa Avenue, San Diego, California
92123, and received not later than midnight on the seventh day following
execution of this Agreement by Director. If Director revokes this Agreement
under this paragraph, the Agreement shall not be effective or enforceable and
Director will not receive the benefits described in paragraph 2 above.

                       12.        If
Director does not revoke this Agreement in the time frame specified in the
preceding paragraph, the Agreement shall be effective at 12:01 a.m. on the
eighth day after it is signed by Director.


                       13.        If
litigation or any other legal proceeding is instituted to interpret or enforce
this Agreement, the prevailing party in that litigation or other legal
proceeding shall be entitled to reasonable attorneys’ fees and costs in
addition to any other relief granted.

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                       I
have read the foregoing Separation Agreement and General Release of All Claims
and I accept and agree to the provisions contained therein and hereby execute
it voluntarily and with full understanding of its consequences.

PLEASE READ
CAREFULLY.  THIS AGREEMENT

CONTAINS A GENERAL RELEASE OF ALL KNOWN AND

UNKNOWN CLAIMS.

Date:  May ____, 2003

	
  


  	
   
	
   

	
   
	
  Kenneth
  Potashner
	
   
	
   

	
   
	
   
	
   

	
  Date:  May ____, 2003
	
   
	
   

	
   
	
   
	
   

	
  Maxwell
  Technologies, Inc.
	
   
	
   

	
   
	
   
	
   

	
   
	
  By:
	
   
	
   

	
   
	
   
	
  


  	
   
	
   

	
   
	
   
	
         Richard
  Balanson
	
   
	
   

	
   
	
   
	
         Chief
  Executive Officer
	
   
	
   

						




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